Public Bill Committee

[Hugh Bayley in the Chair]
PC 62 Dr. John Davies
PC 63 Oxford City Council
PC 64 David Morris
PC 65 Maggie ONeil and Jane Pitcher
PC 66 Arun District Council
PC 67 Sexual Freedom Coalition

Hugh Bayley: I welcome Committee members back following the recess.

Vernon Coaker: I beg to move,
That the Order of the Committee of 27 January be amended as follows
(a) in paragraph (1)(h), after 9.00 am insert and 1.00 pm.
(b) in paragraph (4) leave out 10.25 am and insert 4.00 pm.
Good morning to you, Mr. Bayley, and to the Committee. I hope that everyone had a reasonable recess.
I want to put on record my thanks to the hon. Member for West Chelmsford, the Opposition Front Bench and the Liberal Front Bench for their co-operation on the programming and running of the Committee. It would be remiss, given our experiences on such Committees, not to put that on record.

Question put and agreed to.

Clause 36

Search and seizure of property: England and Wales

Vernon Coaker: I beg to move amendment 156, in clause 36, page 27, line 27, leave out
property held by the person
and insert realisable property.

Hugh Bayley: With this it will be convenient to discuss Government amendments 157 to 162, 167 to 171, 173 to 177, 179 to 181, 186 to 190, 205 to 209 and 334.

Vernon Coaker: Amendments 156 to 162, 167 to 171, 173 to 177, 179 to 181, 186 to 190 and 205 to 209 will be to clauses 36 to 38, which relate to confiscation under the Proceeds of Crime Act 2002. I explained the policy that the amendments address at an earlier sitting so I will be reasonably brief.
The amendments will expand the new powers of search and seizure of property to include other persons holding gifts made by suspects as well as property held by the suspect. Such property, known as tainted gifts, is already included in the confiscation provisions of the 2002 Act. The goal is to prevent a defendant from disposing of their property to avoid confiscation. Law enforcement officers requested the extension of the powers to other persons holding tainted gifts to close a potentially fatal loophole whereby a suspect merely giving property to family members and friends could undermine the viability of the new powers.
Amendment 173 will repeal the existing seizure power in the confiscation provisions. Section 45 of the 2002 Act and the equivalent provisions for Scotland and Northern Ireland provide that property subject to a restraint order may be seized only to prevent its removal from the country. Clauses 36 to 38 provide for more extensive search and seizure powers, which will subsume the existing powers. Their continued existence is therefore not justified and they will be repealed.
Amendments 168 to 171, 187 to 190 and 206 to 209 are minor guiding amendments. The new powers provide for continued detention once the property has been seized. Initially, an officer may detain seized property for 48 hours. If there is no restraint order or if the officer decides not to apply for one, he must apply for a detention order from the magistrates court.
Amendments 169 to 171, 188 to 190 and 207 to 209 provide that any person affected by a detention order can apply for the discharge or variation of it. They may also appeal against any decision made on the order. The persons affected could be the defendant, a third party or the law enforcement officer who applied for the detention order. I know that the hon. Member for Hornchurch, in some of the amendments that he has tabled, is concerned by the level of judicial oversight, rather than the principle behind the Bill. The hon. Member for Chesterfield is also concerned about that, and we will discuss that with other amendments. I just wanted to highlight that particular section as I will mention it in regard to the ability to vary orders, to appeal against orders and so on, but that is a debate for later amendments.
Government amendments 168, 187 and 206 explicitly provide that a magistrates court cannot advise the continued extension of what is known and defined in the Bill as exempt property. Exempt property is defined in new section 47C(4) and includes items necessary for a persons personal use in his or her business location or employment. It also includes:
clothing, bedding, furniture, household equipment, provisions or other things as are necessary for satisfying the basic domestic needs of the defendant and the defendants family.
Upon seizure, the officer can seize any property held by the defendant, or by the recipient of a tainted gift from the defendant, except cash and exempt property. Exempt property therefore, should not be seized, but it is an important additional safeguard that the court takes account of this issue. There is another protection to ensure that the seizure powers are being used proportionately and correctly. It is obviously important that seizure is not used to deprive a person of their ability to live. There are similar exemptions in respect to bailiffs and insolvency law. So, there are established precedents that we have tried to use with respect to this particular measure. The same amendment is made for the three UK jurisdictions, which is why we get triple the number.
Government amendment 344, which is consequential to the Proceeds of Crime Act 2002, merely makes repeals to the Act consequential and necessary due to the other amendments that I have spoken to in this group.

James Brokenshire: I am grateful to the Minister for that explanation of the tranche of Government amendments in this group. I hear what he says about judicial oversight and, clearly, that is an issue that we will debate in further detail in other parts of the Bill.
My principal question for the Minister in respect to this group of amendments regards the extension of the ambit of the search and seizure powers by the creation of the new concept of realisable property. Can he explain how that definition has been arrived at, and how broad it is intended to be? I hear what he has said about the arguments that have been put to him, by police and other law enforcement agencies, on the need to extend those powers and on the way this has been drawn up, but I would like to understand more clearly how broad the definition of realisable property is, because it seems to be very wide in its ambit. Does this provision extend the law significantly, and how will the new clause be applied? What is the actual basis of this provision, and how broad is the definition of realisable property, as envisaged by the Government amendments and their practical application?

Vernon Coaker: Let us re-establish what we are trying to do. We are trying to prevent somebody who a law enforcement officeressentially a police constablebelieves is trying to get rid of property to avoid that property being restrained or detained, so that it can be realised in the future when the confiscation order is made.
Realisable property is not a new concept; it is included in the Proceeds of Crime Act. The easier way to define realisable property is to look at what it is not realisable property, and at what the court would say could not be used for recovering the proceeds of crime. We have therefore tried to define exempt property and say which things cannot, by any stretch of the imagination, be considered to be realisable property. So we are doing it the other way round. Although the concept of realisable property is readily understood and has been used by the courts for a number of years, we are coming at it from the other direction by saying what sort of property cannot be used. We have therefore tried to define exempt property.
One of the problems of creating a list is that, as soon as it is completed, something will arise that is not on it. We shall see this later with some of the other amendments that the hon. Gentleman has tabled. The amendment relating to gangs, for example, tries to define gang-related activity. We have tried to tell the courts what exempt property isnamely, the things that we expect the court not to treat as realisable property. We then leave it to the court to determine what it means. Our approach has been to look at this completely the other way around from the hon. Gentlemans point of view. I hope that that explanation helps him.

Amendment 156 agreed to.

Amendments made: 157, in clause 36, page 27, line 35, leave out
property held by the person
and insert realisable property.
158, in clause 36, page 27, line 42, leave out
property held by the defendant
and insert realisable property.
159, in clause 36, page 28, line 4, leave out
property held by the defendant
and insert realisable property.
160, in clause 36, page 28, line 36, at end insert
(12) In relation to the first or second condition section 77(9) has effect as if proceedings for the offence had been started against the defendant when the investigation was started..(Mr. Coaker.)

Simon Burns: On a point of order, Mr. Bayley. I am sorry to interrupt, but would it be convenient for you and the Committee if these amendments were grouped together and taken in one fell swoop?

Hugh Bayley: Thank you, Mr. Burns. If the Committee is happy I shall ask the Minister to move the two remaining amendments formally and then the rest can be dealt with.

Amendments made: 161, in clause 36, page 28, line 39, leave out
free property held by the defendant
and insert realisable property.
162, in clause 36, page 29, line 10, at end insert
(4A) In relation to realisable property which is free property held by the recipient of a tainted gift, references in subsection (4) to the defendant are to be read as references to the recipient of that gift..(Mr. Coaker.)
163, in clause 36, page 30, line 34, at end insert
(4A) An officer exercising a power under subsection (4) may detain the vehicle for so long as is necessary for its exercise..(Mr. Coaker.)

Clause 37

Search and seizure of property: Scotland

Amendment made: 182, in clause 37, page 39, line 2, at end insert
(4A) An officer exercising a power under subsection (4) may detain the vehicle for so long as is necessary for its exercise..(Mr. Coaker.)

Clause 38

Search and seizure of property: Northern Ireland

Amendment made: 201, in clause 38, page 47, line 10, at end insert
(4A) An officer exercising a power under subsection (4) may detain the vehicle for so long as is necessary for its exercise..(Mr. Coaker.)

James Brokenshire: I beg to move amendment 108, in clause 36, page 30, line 42, leave out from a to end of line 43 and insert the Crown Court.

Hugh Bayley: With this it will be convenient to discuss the following: amendment 109, in clause 36, page 30, line 44, leave out from beginning to end of line 10 on page 31.
Amendment 110, in clause 36, page 31, line 15, leave out a justice of the peace and insert the Crown Court.
Amendment 111, in clause 36, page 31, line 21, leave out a justice of the peace and insert the Crown Court.
Amendment 112, in clause 36, page 31, line 27, leave out a justice of the peace and insert the Crown Court.
Amendment 123, in clause 36, page 34, line 37, leave out paragraph (b).

James Brokenshire: We come to an issue to which the Minister has alluded: appropriate judicial oversight. The principal point with regard to the significant powers set out in the Bill is which is the right court to consider the hearings for extending the period of seizure. There are two factors to consider. First, there is the seriousness of the power and, therefore, the seniority of the court that should decidea relevant factor in its own right. Secondly, there is the complex nature of the issues at stake, and I think that complex areas of law are likely to arise when the powers envisaged in the Bill are used.
On the point about seriousness, cases involving other existing powers for which a court authorisation is required are currently heard by the Crown court, so we believe that that precedent should be adhered to in this context. I am sure that the Minister will pray in aid the need for speed, the availability of judges and the fact that at times it might be necessary to use the powers set out in the Bill quickly, but I see those as administrative requirements that do not get to the basis of the seriousness of the powers or determine the type of court required to provide the necessary judicial oversight.
If the Government want to make that power available, they must do so on the basis of appropriate judicial oversight, and if they need to organise arrangements so that Crown court judges are available at short notice, that is what they should do, in conjunction with the Ministry of Justice, to reflect the nature of the powers under consideration. Liberty, in its briefing note to the Committee, states that
under the current provisions in relation to restraint orders (which are less intrusive than this proposed measure) such orders must be approved by the Crown Court. No reason is given as to why, at the very least, the Crown Court is not involved in providing judicial oversight.
The Crown court is the more appropriate court, given the serious interference with the right to privacy and property that the provisions introduce.
With regard to the issue of complexity, the Bar Council makes some equally important observations that question whether Crown court judges are suitably qualified to address the detailed points of law on trust issues and distinctions between legal and equitable interests in particular assets. There are several quite technical legal issues involved in that regard, and the Bar Council has highlighted the judgment in the Court of Appeal case of the Serious Fraud Office v. Lexi Holdings. It stated that
there can be little doubt that the issues which arose in this case concerning beneficial interests, equitable charges and tracing were far from straightforward. They are not part of the daily work of most Crown Court judges, and indeed this constitution of the Court of Appeal Criminal Division was deliberately arranged so as to ensure that appropriate expertise in matters normally falling within the jurisdiction of the Chancery Division was available.
I think that the Bar Council used that example to demonstrate the challenges, complexities and issues that might arise in the use of that particular power, so without in any way wanting to question or undermine the advice that would be given to the Justices of the Peace on the exercise of their powers, I think that the issues are by their nature extremely complicated.
In that case, the Court of Appeal suggested that, because of the focus and nature of the activities that Crown court judges would undertake, some of the distinct issues of trust, such as ownership rights and the nature of ownership and of particular assets, were not part and parcel of the daily work of those courts. Indeed, if that argument is made about Crown court judges, I am sure that the argument can by extension be made with regard to magistrates courts.
It was difficult to envisage how those powers could be used effectively with that level of oversight, given the highly complex areas of law beyond which a lay magistrate might be expected to make a determination, even with the appropriate legal support that I have mentioned. Because we think that judicial oversight at that level is appropriate for the type of powers envisaged in the Governments proposals, we consider the measure to be inappropriate. I urge the Government to reconsider their stance and consider carefully what would be suitable judicial oversight to ensure that these powers are used effectively, proportionately and appropriately. We believe the most appropriate way forward is to have that higher level of oversight, based on the precedent for what is envisaged in these provisions.

Paul Holmes: These amendments get to the core of the debate on clause 36. It is not the principle of what we are seeking to achieve that is at stake but the mechanism and detail of how we do it. In essence, clause 36 and related clauses extend the power to search and seize property before conviction, before proceedings have commenced and on the suspicion of reasonable cause by the police officers involved. During the Committees evidence sessions, both Liberty and the Bar Council, for example, expressed concerns about that power.
When Paul Evans, the director of intervention at the Serious Organised Crime Agency, gave evidence on 27 January, he argued that these changes were largely technical, backed up by the experience of policing in this area since 2002, but the Bar Council argued that they were substantial, and not technical, changes. Martin Evans of the Bar Council said:
The Bar Council has no objection to the principle that, in effect, personal assetscars, jewellery or household effects, and other such thingscould be detained under this power.
However, he went on to say that the Bar Council had particular concerns about moving to a lower tier of oversightfrom the Crown court to magistrates:
The proposal permits, on an application to the magistrates, the property to be detained indefinitely. That is a concern because, as I said, it introduces a lower tier.[Official Report, Policing and Crime Public Bill Committee, 29 January 2009; c. 86, Q141.]
Liberty has said similar things. Collectively the argument is, what is the evidence that the current restraint system is not working properly? Paul Evans argued that the experience of the past five to six years indicates the system is not working adequately and requires those changes. What is the evidence that the current powers are not adequate? Above all, why are we moving from Crown court supervision to the lower tier of magistrate supervision? The Minister has not explained why we are taking that step in the Bill, yet it is a fundamental one in the eyes of organisations such as the Bar Council and Liberty.
Another question arises from the code of practice. The Minister has reassured us at various points that the Government and the police are not seeking to infringe human rights. They have to take into account European declarations on human rights. When Mick Creedon, chief constable of Derbyshire, gave evidence, he said that, of course, human rights infuse everything they do. Much of this is going to be wrapped up in regulations in the code of practice, which we have not yet seen. Liberty expressed concern that such a major step should be taken based on regulations in a code of practice that is yet to be seen, rather than on regulations in primary legislation.
At the crux of these amendments is the question of why we should move from Crown court supervision to a lower tier of magistrates. That raises related questions regarding the evidence that we need to adopt these new powers, as well as what is going to be in the code of practice and when we are going to see itit is not sufficient just to receive reassurances from the Minister.

Vernon Coaker: The hon. Member for Chesterfield makes a reasonable point, but he must understandand I have said this on a number of occasionsthat if he were in my position or that of the Home Secretary, he would have to wrestle with the fact that a significant number of confiscation orders, which he knows can be passed only by a Crown court, are unenforceable because the assets cannot be got at. That is why he is not against the measure in principle. Frankly, accepting that one can detain assets on arrest, and sometimes in other circumstances, is a big step for the Government, the Opposition and the Liberal Democrats.
The public policy problem is about how we deal with the fact that confiscation orders are unenforceable in many cases. The hon. Gentleman says, Where is the evidence? The answer is that confiscation orders involve large numbers of assets that we simply cannot get atfor want of a better way to put it. That public policy problem is part of the issue. The hon. Members for Hornchurch and for Chesterfield accept that fact, so we have to do something about it. Law enforcement, including the excellent chief constable of Derbyshire, who is very close to the hon. Gentlemans heart, and the Serious Organised Crime Agency tell us that if we are to be effective, quick and easy access to the courts is needed, which is why we proposed the measure.
Let me take the hon. Member for Chesterfield through the procedure. The police, or an accredited financial investigator, decide that they are going to search and seize property. Normally, they would seek prior approval, and there is such provision in the Bill. FranklyI may not be supposed to say thisI was not sure if an inspector was a senior enough police officer. I thought that there would be an amendment on that because it was something that I had thought about. However, I am reassured about the rank of inspector in every other aspect of prior approval. In most circumstances, we would expect there to be prior approval, but if that approval cannot be accessed, there would be 48 hours to hold the property, then the authorities would obviously have to go to a Crown court for a restraint order. I expect the more serious things to go to a Crown court, but a magistrates court will be acceptable for a simple detention order. Therefore, there is judicial oversight, but the hon. Gentleman is concerned about the level of that oversight; I have been advised that the magistrates courts are perfectly capable.
The hon. Gentleman asked why we are doing this and what the problem with restraint orders is. As the Bar Council said, the property remains in the possession of the person concerned. The fundamental difference with these proposals is that it does not stay with that personthe property is searched, seized and detained. I hope that that answers the specific point about why restraint orders alone are not sufficient. The new power means that the Crown court can add detention of property to the restraint order where appropriate, and nothing can be done with restraint orders except by the Crown court. I imagine that it will deal with more serious concerns and larger amounts of property and the magistrates court will deal with other property.
After 48 hours, further approval is needed to detain the property. There are significant safeguards, about which the hon. Members for Chesterfield and for Hornchurch asked. If somebody acts without prior approval, they will have to report to the appointed person. The Bill also offers another important safeguard that has to be complied with, as the Secretary of State must publish any report received by the appointed person and lay a copy before Parliament, as is the case with other powers under the Proceeds of Crime Act 2002.
As the hon. Member for Chesterfield said, we have not yet seen the code of practice, but because I was concerned about safeguards, the Bill specifically states that the code will be published in draftI know that we have not seen it yetand that the Secretary of State must
consider any representations made about the draft,
and
if the Secretary of State thinks appropriate, modify the draft in the light of any such representations.
The Secretary of State must also lay the draft before Parliament, which must then approve the code of practice. Therefore, even though the code of practice has not yet been seen or published, there is a significant effort in the Bill to try to do some of the things suggested by the hon. Gentleman to provide the reassurance that he thinks necessary.

Paul Holmes: I thank the Minister for that response. Will the code of practice be seen before or after Report?

Vernon Coaker: It certainly will not be seen before Report. The best reassurance that I can give the hon. Gentleman is that Members will have a proper opportunity to look at the code of practice before it is debated by Parliament.
The code will set out how the powers should be exercised proportionately. Before carrying out a seizure, there must be some estimate of the persons benefit from criminal conduct and of the value of any property to be seized to ensure that only property up to the value of the former is actually seized. There will also be guidelines on how to assess the risk of dissipation, which is what we are all worried about. The code will make clear that it should not be the default position that any person being arrested for an acquisitive crime should have their property seized. It will be important to assess the extent of the persons criminality and of their unexplained income. The code will provide that particular care should be taken with low-level offenders against whom a confiscation order is unlikely to be made. It will also provide guidance on the definition of exempt property that may not be seized. That point might be of interest to the hon. Member for Hornchurch, because it relates to an earlier discussion. The code will provide for a periodic review by a senior officer of the continuing detention of property under a court order. I hope that that informs the hon. Member for Chesterfield on what we expect the code of practice to contain. Finally, I know that this will not specifically answer the points made by the hon. Gentlemen, but a detention order is subject to an appeal to the Crown court. If a detention order is made in a magistrates court, a defendant can appeal to the Crown court if they wish to object to the order.

James Brokenshire: If, as the Minister said, he wrestled with the concept of whether the inspector was the appropriate level of officer to use the power in the first place, how did he arrive at the decision that a justice of the peace in a magistrates court was the right level for the initial scrutiny? He will recognise that appeals to the Crown court would be at a later stage. Our argument is that the first line of defence should be the Crown court.

Vernon Coaker: I took advice from law enforcement officers. As we heard, the member of the Association of Chief Police Officers who deals with the issue said that he felt that the magistrates court was an appropriate level of judicial scrutiny, as did the Serious and Organised Crime Agency. In taking those organisations judgment into account, I felt that that level was appropriate.
This is not new; many of the Bills provisions replicate provisions in the Proceeds of Crime Act 2002. Given the safeguards that I have mentioned, I am satisfied that that is the appropriate level of judicial approval. We recognise the seriousness of the powersthat is why there are many safeguards. I take the point of the hon. Member for Hornchurch that the initial decision is made in the magistrates court and that although that decision is appealable to the Crown court, that is a latter stage. However, that means that if the Crown court believes that the magistrates court has acted disproportionately and unnecessarily, it can vary or discharge the detention order.

Paul Holmes: I have listened carefully to the Ministers reassurances, but I wish to press him further. In view of what the police have saidpresumably in light of their operational experiencewhy do we need to ratchet this down to the magistrates court? What specific problems have the police encountered over the past five or six years? Has there been a lack of immediate access to the Crown court, or has the Crown court not agreed enough with the police? What has led the police to recommend this change to the Government, when the Bar Council, for example, is alarmed at the implications of moving from the Crown court to a lower tier?

Vernon Coaker: As I have said, we have taken the advice of the police. The provision replicates similar powers in the 2002 Act, particularly with regard to suspect cash. These are judgments that people make. The magistrates court provides immediacy and speed of action and the police or other law enforcement bodies can therefore act speedily to ensure that assets are not dissipated. Given the safeguards, particularly the appeal to the Crown court, this response is appropriate and proportionate and I therefore ask the hon. Member for Hornchurch to consider withdrawing the amendment.

James Brokenshire: The Ministers response to our arguments about the appropriate level of judicial oversight is neither compelling nor persuasive. He talked about wrestling with his conscience over whether the inspector level was the appropriate officer level, and we may perhaps wish to come back to that. In essence, he said that we should take great assurance from and rely on the code of practice, but one of the problems is that the Governments assurance always seems to be based on something that is not published, or is not available when we are considering significant and substantive powers sought in a Bill. It is difficult for members of the Committee to accept the Governments assurance when we have not seen the document and do not know what is in it.
We come back to same issues, for example regarding the code of practice on licensing, and I am sure that we will come to them regarding DNA evidencethe Government have tabled amendments on that as well. We just do not know the context. The Government believe that, because of the code of practice, the magistrates court is a more suitable route, but how can they say that with such assurancenotwithstanding what the Bill might say about what the code of practice may includewhen we have not seen the code? We can properly assess whether what we are mandating is appropriate only when we have seen that detail.
Mr. Coakerrose

James Brokenshire: I will give way to the Minister, although I think I know what point he will make.

Vernon Coaker: This is precisely why we sometimes try to lay out in great detail the process of drawing up a code of practice. Bills often state that a code of practice will be published in due course, and I have therefore gone out of my way, with the officials, to ensure that there are various stages to that process, which will, in the end, be a matter for Parliament to decide. Also, this is a similar practice to that found in other codes of practicein the Police and Criminal Evidence Act 1984, for example. However, I have tried to respond to the points that the hon. Gentleman has made in the way that the Bill was drawn up.

James Brokenshire: I am grateful to the Minister for going out of his way, to use his phrase. However, I still do not think that that is sufficient. Whatever may go into a code of practice or guidance on the way in which these powers can be utilised, that code of practice cannot get to the root of complicated and fundamental points of law and the judgments that will have to be reached on those points of law.
As the Minister will know, in the past I have, sadly, been a lawyer and practised law. I can therefore tell him that issues of equity, legal interest and tracing claims of ownership are very technical issues, which are quite challenging. That is the fundamental point that the Bar Council is seeking to make in the matters that it highlights. When the Minister talked about the various groups and organisations that he had consulted when he was determining that this level of judicial oversight was correct, it was interesting that they all seemed to focus on the enforcement side. There did not seem to have been any consultation with, for example, the Magistrates Association or with the judiciary themselves. Indeed, the Bar Council has made its views very clear, through the note that it provided to this Committee.
If the police and the Serious Organised Crime Agency are saying that they require scrutiny to be at this level, perhaps because of certain practical issues such as the availability of judges or other associated issues, that should be considered. However, I do not think that the Minister has said that. He has said that he has consulted those agencies and they have advised him that they believe that this is the most appropriate level of scrutiny to be applied, but without necessarily giving back-up information or justification for that.
The point was made that the Crown court is used as the appropriate level of judicial scrutiny for restraint orders, which, it is argued, are less intrusive than the types of orders that we are contemplating here. Therefore, although I understand that the Minister has said that he believes that this level of scrutiny is appropriate in the circumstances, I do not think that he has made his case sufficiently strongly to persuade us. That is why I want to divide the Committee on amendment 108.

Question put, That the amendment be made.

The Committee divided: Ayes 6, Noes 7.

Question accordingly negatived.

Vernon Coaker: I beg to move amendment 261, in clause 36, page 32, line 29, leave out subsection (2) and insert
(2) The property may be detained initially for a period of 48 hours.
(2A) But it must be released if within that period the appropriate officer
(a) ceases to be satisfied as mentioned in section 47B(1), or
(b) ceases to have reasonable grounds for the suspicion mentioned in section 47C(1)..

Hugh Bayley: With this, it will be convenient to discuss the following: amendment 113, in clause 36, page 32, line 29, leave out subsection (2) and insert
(2) Provided that any of the conditions referred to in section 47B continue to be satisfied, the property may be detained initially for a period of 48 hours.
Government amendments 263 and 264.

Vernon Coaker: After the Division, may I restore harmony and also reassure the hon. Member for Hornchurch that I have not abandoned my style and approach by saying that, with respect to this particular group of amendments, I see a lot of merit in amendment 113? It raises some important issues. However, I would just like to go through the Government amendments, which I believe address the point that the hon. Gentleman has made in amendment 113. It is important to put this on the record.
I confirm that our policy intention is that property may be detained under proposed new section 47J only for as long as the appropriate officer is satisfied that all conditions under proposed new section 47B continue to be met and he or she continues to have reasonable grounds for suspecting that the property might be dissipated. If the officer is not satisfied on either count, I accept that the property must be released. Government amendment 261 deals with that important point. I am grateful to the hon. Members for Hornchurch and for Bury St. Edmunds for identifying the gap in the provisions.
Government amendments 261, 263 and 264 will add to the new sections of the 2002 Act proposed in clauses 36 to 38. Those provide powers to search and seize property that might otherwise not satisfy a confiscation order or might be diminished in value. We tabled the amendments in response to amendments tabled by the Opposition and we are grateful for their assistance in pointing out the issue. We had taken the point to be implicit, but in response to amendment 113, we are making it explicit.
The Government amendments will add a further safeguard to the operation of the powers, which I think will be welcomed by the Committee. If an officer seizes property, he may detain it for 48 hours before obtaining judicial approval for its continued detention. The amendments clarify that the proposed new section 47B preconditions to exercise the power, and the suspicion of dissipation mentioned in proposed new section 47C(1), must still exist for the continued detention of the property during the 48 hours. That will place a much stronger obligation on the seizing officer to continually consider the grounds on which he operates the powers and the reasons for which the property was seized.
I will take this opportunity to signal to the Committee that I will table a further amendment on Report. In our 12 February sitting, we a had a constructive debate on the need for the police and others to use seizure and detention powers with care and discretion. We all accept that seizing someones property is a serious matter. I undertook to consider further the matter of proportionality in the use of powers to detain seized property, and I have done so. I see some merita lot of merit, if I am honestin inserting an explicit obligation for the detaining officer to release property when they are no longer satisfied that the conditions for its detention are met. Necessity and proportionality will be an ongoing consideration, but as a strong indication of the importance that I attach to the proportionate use of the powers, I will place such an obligation clearly in the Bill.
I know that I disagreed with Opposition Members on the last point, but I hope that I have given them and those who read our debates some reassurance that we are continually considering how these necessary powers can be used proportionately, as they are a significant extension of powers.

James Brokenshire: As the Minister said, Government amendment 261 addresses the issue we raised in tabling amendment 113, but in a slightly different way. Clearly, our point has been taken on board. We welcome that and the Ministers preparedness to accept our points on the operation of clause 36. I also note his comments on proportionality, which we debated before the recess. We look forward to seeing his amendment on Report to address the need for these powers to be used in a reasonable way.
We are grateful to the Minister for listening to our points and for tabling the amendments. Government amendments 263 and 264 will make the same changes as amendment 261 in subsequent provisions. On that basis, we accept the Government amendments that will implement our proposal.

Amendment 261 agreed to.

Amendments made: 164, in clause 36, page 32, line 41, at end insert
(3) If such an application is made within that period and the application is refused, the property may be detained until there is no further possibility of an appeal against
(a) the decision to refuse the application, or
(b) any decision made on an appeal against that decision..
Amendment 165, in clause 36, page 32, line 41 , at end insert
(4) In subsection (2) the reference to the period mentioned in section 47J includes that period as extended by any order under section 47M..
Amendment 166, in clause 36, page 33, line 7, at end insert
(3) If such an application is made within that period and the application is refused, the property may be detained until there is no further possibility of an appeal against
(a) the decision to refuse the application, or
(b) any decision made on an appeal against that decision..(Mr. Coaker.)

James Brokenshire: I beg to move amendment 114, in clause 36, page 33, line 15, leave out  A magistrates court and insert The Crown Court.

Hugh Bayley: With this it will be convenient to discuss the following: Amendment 115, in clause 36, page 33, line 27, at end insert
provided that the Court shall only extend the period of detention under Clause 47J by such period as it considers reasonable and proportionate.
Amendment 116, in clause 36, page 33, line 36, leave out subsection (5).
Amendment 117, in clause 36, page 33, line 40, at end insert
47MA Right of third parties to make representations
(1) The Crown Court must, on an application by a person, give the person an opportunity to make representations in proceedings before making an order under section 47M if it considers that the making of the order would be likely to have a significant adverse effect on that person.
(2) The Crown Court must, on an application by a person, give the person an opportunity to make representations in proceedings before it about the variation of an order under section 47M if it considers that
(a) the variation of the order; or
(b) a decision not to vary it;
would be likely to have a significant adverse effect on that person.
(3) The Crown Court must, on an application by a person, give the person an opportunity to make representations in proceedings before it about the discharge of an order under section 47M if it considers that
(a) the discharge of the order; or
(b) a decision not to discharge it;
would be likely to have a significant adverse effect on that person.
(4) The Court of Appeal when considering an appeal in relation to an order under section 47M must, on an application by a person, give the person an opportunity to make representations in the proceedings if that person were given an opportunity to make representations in the proceedings which are the subject of the appeal..
Amendment 118, in clause 36, page 34, line 21, leave out magistrates court and insert Crown Court.
Amendment 119, in clause 36, page 34, line 23, leave out Crown Court and insert Court of Appeal.
Amendment 120, in clause 36, page 34, line 25, leave out Crown Court and insert Court of Appeal.
Amendment 121, in clause 36, page 34, line 26, leave out magistrates courts and insert Crown Courts.
Amendment 122, in clause 36, page 34, line 29, leave out subsection (3).

James Brokenshire: A number of these amendments repeat some of my earlier arguments about the need for proportionality, for judicial oversight to come from the Crown court rather than the magistrates court and for appeal rights to be to the Court of Appeal. In the light of our previous debate I do not intend to rehearse those arguments again. However, I ask the Minister to reflect carefully on the points that have been made not just by me but by the Bar Council and Liberty on the appropriate level of judicial oversight. Obviously we look forward to seeing further Government amendments on the proportionality of the use of these provisions.
Amendment 117 makes a slightly different point. It seeks to give third parties who have an interest in the assets that have been detained, and in respect of which an application for further detention is sought, the right to make representations to the court. As previously noted, innocent parties may have a direct interest in the relevant assets and their continued detention may cause them hardship. In order that convention rights are maintained and upheld, amendment 117 provides for a specific right to make representations to the court.
It is interesting to note that Government amendment 270 adds a right for third parties to make representations prior to the realisations of assets. If that concept is accepted in that context why should it not equally apply if an order is granted authorising the detention of such assets for an extended period? While we are looking at this part of clause 36, could the Minister tell us why proposed new section 47N(3), on the discharge, variation and lapse of detention orders, provides that an application must be made to the court to discharge the detention order where proceedings for the offence mentioned have been concluded? Why is that not automatic? Why is that court application required? Why does the order not simply lapse in these circumstances?

Vernon Coaker: Let me deal with what the hon. Gentleman has said. I think he will be pleased with one or two of the points that I shall make, to continue with this constructive approach. He has made one or two interesting points with his amendments

David Ruffley: Youll ruin his career at this rate.

Vernon Coaker: I am trying to enhance his career. Constructive debate is a way to enhance ones career.
These amendments deal with when the hearing takes place, rather than the level of judicial oversight for the prior approval that we debated earlier. They are about which court is appropriate to deal with the various parts of the Bill. Amendments 114, 116 and 118 to 122 are about which court is appropriate for making an order for further detention of the seized property and for considering appeals. As I explained earlier, these new powers are based on similar provisions in the Proceeds of Crime Act 2002 as regards detention and forfeiture of cash. Judicial oversight as regards seized cash is provided by the magistrates court or a justice of the peace. An appeal against forfeiture of cash is heard in the Crown court. We will, therefore, not create a precedent with such further detention powers and the appeals provisions in clause 36.
As I have stressed from the outset, we expect that higher value or complex cases would be subject to a restraint order. In those cases, the authority for further detention of property would come from the Crown courtas I have said on numerous occasions, restraint orders can be dealt with only by the Crown court. It is only in those cases where there is no restraint order that application further to detain seized property is made to the magistrates court. The magistrate must be satisfied that there are reasonable grounds for suspecting that the seized property might be disposed of or hidden, or that the value of the property might be diminished.
However, the hon. Member for Hornchurch raises an important point in amendments 116 and 122 and I have some sympathy with the concerns that he raises. I want to be satisfied as to the appropriate level of judicial oversight in such cases and whether it is right for a single justice of the peace, rather than a magistrates court, to deal with the hearings in relation to detention orders. I would therefore like to consider further whether a justice of the peace would be properly equipped to consider applications under proposed new sections 47M and 47N. I hope that the hon. Gentleman will find it helpful if I say that I will give further consideration to those amendments and will return to those matters as the Bill progresses. On that basis, I ask the hon. Gentleman to consider withdrawing his amendments, but I stress that I will consider his points further.
Regarding amendment 115, I again recognise the importance of the detention period being reasonable and proportionate. It will be for the magistrates courts to consider what is a reasonable and proportionate period for which the property can be detained. In addition, as I have previously explained, any person affected by an order can apply at any time for variation or discharge of the order. More generally, the proposed new sections 47B(9) and 47B(10) of the Proceeds of Crime Act, set out in clause 36, mean that the powers cannot be exercised in cases where there is undue delay in the criminal proceedings, or the application to reconsider the confiscation order. Furthermore, a proposed new section 47M(3) prevents undue delay creeping in as regards the continued detention of the property. Such delay is a ground for a discharge of a detention order.
Amendment 117 draws attention to the important issue of the rights of third parties. Let me assure the Committee and the hon. Gentleman that we fully recognise the need to take account of third party interests in detained property. The defendant, or indeed any third party affected by a detention order, can apply for the discharge or the variation of that order. That gives third parties the opportunity to apply to the court for the release of seized property.
The provisions on third party rights in clause 36 mirror those in section 42(3) of the 2002 Act, as regards the rights of third parties to apply for the variation or discharge of a restraint order. There is also a right of appeal to the Crown court against a magistrates courts decision. As I have said before, those are all appropriate safeguards to ensure that the seizure and detention powers are used proportionally. However, I accept that the rights of third parties are important and therefore I would like to consider further the scope for allowing third parties the opportunity, on application, to make representations in respect of hearings under proposed new section 47N.
Beyond that, a code of practice will contain further details on the exercise of the search and seizure powers, including the need to take account of third party rights, in order to ensure that they are exercised lawfully and proportionately. On the issue of the code of practice, I will take the opportunity to respond to an issue raised by the Bar Council in regard to the dissipation of assets. I confirm to the Committee that the code will make it clear that the risk of dissipation will have to be significant before the property is seized.
I hope that with those remarks and explanation, the offer to consider some of the hon. Gentlemans points and to consider further the question of the rights of third parties, the hon. Gentleman might consider withdrawing his amendments.

James Brokenshire: I am grateful for the way in which the Minister responded to this group of amendments in that he is prepared to reflect on which is the appropriate court in respect of the provisions in the clause. Equally, I am grateful that he will look also at other points, for example third party rights. While he says that it will be open to a third party to make an application, it needs to be clear that third parties are not prejudiced and that if they have rights in respect of the assets, they are able to make representations at an appropriate stage. If there is an initial hearing, it should be possible to make representations then, rather than the party being forced subsequently to make an application to challenge or override an order that has been granted. However, I accept the spirit in which the Minister replied, and in light of his assurance that he will look at the matterwe will listen carefully to how he responds on ReportI beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 167, in clause 36, page 33, line 20, leave out free property held by the defendant and insert realisable property.
Amendment 168, in clause 36, page 33, line 20, before , and insert
other than exempt property (within the meaning of section 47C(4)).
Amendment 169, in clause 36, page 34, line 1, leave out paragraphs (b) and (c) and insert or
( ) any person affected by the order..
Amendment 170, in clause 36, page 34, line 26, at end insert
( ) a person mentioned in section 47M(3), or.
Amendment 171, in clause 36, page 34, line 27, leave out paragraphs (a) and (b) and insert
( ) any person affected by the order..(Mr. Coaker.)

Amendment proposed: 172, in clause 36, page 34, line 31, at end insert
47OA Detention of property pending section 47O appeal
(1) This section applies where
(a) an application for an order under section 47M is made within the period mentioned in section 47J, and
(b) the application is refused.
(2) This section also applies where
(a) an order is made under section 47M extending the period for which property may be detained under section 47J, and
(b) the order is discharged or varied so that detention of the property is no longer authorised by virtue of the order.
(3) The property may be detained until there is no further possibility of an appeal against the decision to refuse the application or discharge or vary the order (as the case may be)..(Mr. Coaker.)

Question put, That the amendment be made.

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Amendment 172 agreed to.

Amendments made: 262, in clause 36, page 34, line 31, at end insert
47OB Hearsay evidence in detention order proceedings
(1) Evidence must not be excluded in detention order proceedings on the ground that it is hearsay (of whatever degree).
(2) Sections 2 to 4 of the Civil Evidence Act 1995 apply in relation to detention order proceedings as those sections apply in relation to civil proceedings.
(3) Detention order proceedings are proceedings
(a) for an order under section 47M;
(b) for the discharge or variation of such an order;
(c) on an appeal under section 47O.
(4) Hearsay is a statement which is made otherwise than by a person while giving oral evidence in the proceedings and which is tendered as evidence of the matters stated.
(5) Nothing in this section affects the admissibility of evidence which is admissible apart from this section..
Amendment 173, in clause 36, page 35, line 12, leave out subsection (3) and insert
(3) Omit section 45 (seizure)..(Mr. Coaker.)

Clause 36, as amended, ordered to stand part of the Bill.

Clause 37

Search and seizure of property: Scotland

Amendments made: 174, in clause 37, page 36, line 1, leave out property held by the person and insert realisable property.
Amendment 175, in clause 37, page 36, line 9, leave out property held by the person and insert realisable property.
Amendment 176, in clause 37, page 36, line 16, leave out property held by the accused and insert realisable property.
Amendment 177, in clause 37, page 36, line 21, leave out property held by the accused and insert realisable property.
Amendment 178, in clause 37, page 37, line 4, at end insert
(11) In relation to the first or second condition references in sections 127C to 127P to the accused are to the person mentioned in that condition..
Amendment 179, in clause 37, page 37, line 4, at end insert
(12) In relation to the first or second condition section 144(8) has effect as if proceedings for the offence had been started against the accused when the investigation was started..
Amendment 180, in clause 37, page 37, line 7, leave out free property held by the accused and insert realisable property.
Amendment 181, in clause 37, page 37, line 24, at end insert
(4A) In relation to realisable property which is free property held by the recipient of a tainted gift, references in subsection (4) to the accused are to be read as references to the recipient of that gift..
Amendment 182, in clause 37, page 39, line 2, at end insert
(4A) An officer exercising a power under subsection (4) may detain the vehicle for so long as is necessary for its exercise..
Amendment 263, in clause 37, page 40, line 43, leave out subsection (2) and insert
(2) The property may be detained initially for a period of 48 hours.
(2A) But it must be released if within that period the appropriate officer
(a) ceases to be satisfied as mentioned in section 127B(1), or
(b) ceases to have reasonable grounds for the suspicion mentioned in section 127C(1)..
Amendment 183, in clause 37, page 41, line 10, at end insert
(3) If such an application is made within that period and the application is refused, the property may be detained until there is no further possibility of an appeal against (or review of)
(a) the decision to refuse the application, or
(b) any decision made on an appeal against (or review of) that decision..
Amendment 184, in clause 37, page 41, line 10, at end insert
(4) In subsection (2) the reference to the period mentioned in section 127J includes that period as extended by any order under section 127M..
Amendment 185, in clause 37, page 41, line 20, at end insert
(3) If such an application is made within that period and the application is refused, the property may be detained until there is no further possibility of an appeal against (or review of)
(a) the decision to refuse the application, or
(b) any decision made on an appeal against (or review of) that decision..
Amendment 186, in clause 37, page 41, line 32, leave out free property held by the accused and insert realisable property.
Amendment 187, in clause 37, page 41, line 32, before , and insert
other than exempt property (within the meaning of section 127C(4)).
Amendment 188, in clause 37, page 42, line 12, leave out paragraphs (b) and (c) and insert or
( ) any person affected by the order..
Amendment 189, in clause 37, page 42, line 37, at end insert
( ) a person mentioned in section 127M(3), or.
Amendment 190, in clause 37, page 42, line 38, leave out paragraphs (a) and (b) and insert
( ) any person affected by the order..
Amendment 191, in clause 37, page 42, line 41, leave out 30 and insert 21.(Mr. Coaker.)

Amendment proposed: 192, in clause 37, page 42, line 44, at end insert
127OA Detention of property pending section 127O appeal
(1) This section applies where
(a) an application for an order under section 127M is made within the period mentioned in section 127J, and
(b) the application is refused.
(2) This section also applies where
(a) an order is made under section 127M extending the period for which property may be detained under section 127J, and
(b) the order is discharged or varied so that detention of the property is no longer authorised by virtue of the order.
(3) The property may be detained until there is no further possibility of an appeal against the decision to refuse the application or discharge or vary the order (as the case may be)..(Mr. Coaker.)

Question put, That the amendment be made.

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Amendment 192 agreed to.

Amendment made: 193, in clause 37, page 43, line 11, leave out subsection (3) and insert
(3) Omit section 126 (seizure)..(Mr. Coaker.)

Clause 37, as amended, ordered to stand part of the Bill.

Clause 38

Search and seizure of property: Northern Ireland

Amendments made: 194, in clause 38, page 44, line 5, leave out property held by the person and insert realisable property.
Amendment 195, in clause 38, page 44, line 13, leave out property held by the person and insert realisable property.
Amendment 196, in clause 38, page 44, line 20, leave out property held by the defendant and insert realisable property.
Amendment 197, in clause 38, page 44, line 25, leave out property held by the defendant and insert realisable property.
Amendment 198, in clause 38, page 45, line 9, at end insert
(12) In relation to the first or second condition section 225(9) has effect as if proceedings for the offence had been started against the defendant when the investigation was started..
Amendment 199, in clause 38, page 45, line 12, leave out free property held by the defendant and insert realisable property.
Amendment 200, in clause 38, page 45, line 30, at end insert
(4A) In relation to realisable property which is free property held by the recipient of a tainted gift, references in subsection (4) to the defendant are to be read as references to the recipient of that gift..
Amendment 201, in clause 38, page 47, line 10, at end insert
(4A) An officer exercising a power under subsection (4) may detain the vehicle for so long as is necessary for its exercise..
Amendment 264, in clause 38, page 49, line 7, leave out subsection (2) and insert
(2) The property may be detained initially for a period of 48 hours.
(2A) But it must be released if within that period the appropriate officer
(a) ceases to be satisfied as mentioned in section 195B(1), or
(b) ceases to have reasonable grounds for the suspicion mentioned in section 195C(1)..
Amendment 202, in clause 38, page 49, line 19 , at end insert
(3) If such an application is made within that period and the application is refused, the property may be detained until there is no further possibility of an appeal against
(a) the decision to refuse the application, or
(b) any decision made on an appeal against that decision..
Amendment 203, in clause 38, page 49, line 19 , at end insert
(4) In subsection (2) the reference to the period mentioned in section 195J includes that period as extended by any order under section 195M..
Amendment 204, in clause 38, page 49, line 29, at end insert
(3) If such an application is made within that period and the application is refused, the property may be detained until there is no further possibility of an appeal against
(a) the decision to refuse the application, or
(b) any decision made on an appeal against that decision..
Amendment 205, in clause 38, page 49, line 42, leave out
free property held by the defendant
and insert realisable property.
Amendment 206, in clause 38, page 49, line 42, before , and insert
other than exempt property (within the meaning of section 195C(4)).
Amendment 207, in clause 38, page 50, line 25, leave out paragraphs (b) and (c) and insert or
( ) any person affected by the order..
Amendment 208, in clause 38, page 51, line 7, at end insert
( ) a person mentioned in section 195M(3), or.
Amendment 209, in clause 38, page 51, line 8, leave out paragraphs (a) and (b) and insert
( ) any person affected by the order..(Mr. Coaker.)

Amendment proposed: 210, in clause 38, page 51, line 12, at end insert
195OA Detention of property pending section 195O appeal
(1) This section applies where
(a) an application for an order under section 195M is made within the period mentioned in section 195J, and
(b) the application is refused.
(2) This section also applies where
(a) an order is made under section 195M extending the period for which property may be detained under section 195J, and
(b) the order is discharged or varied so that detention of the property is no longer authorised by virtue of the order.
(3) The property may be detained until there is no further possibility of an appeal against the decision to refuse the application or discharge or vary the order (as the case may be)..(Mr. Coaker.)

Question put, That the amendment be made.

The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to.

Amendment 210 agreed to.

Amendments made: 265, in clause 38, page 51, line 12, at end insert
195OB Hearsay evidence in detention order proceedings
(1) Evidence must not be excluded in detention order proceedings on the ground that it is hearsay (of whatever degree).
(2) Articles 4 and 5 of the Civil Evidence (Northern Ireland) Order 1997 apply in relation to detention order proceedings as those articles apply in relation to civil proceedings.
(3) Detention order proceedings are proceedings
(a) for an order under section 195M;
(b) for the discharge or variation of such an order;
(c) on an appeal under section 195O.
(4) Hearsay is a statement which is made otherwise than by a person while giving oral evidence in the proceedings and which is tendered as evidence of the matters stated.
(5) Nothing in this section affects the admissibility of evidence which is admissible apart from this section..
Amendment 211, in clause 38, page 51, line 39, leave out subsection (3) and insert
(3) Omit section 194 (seizure)..(Mr. Coaker.)

Clause 38, as amended, ordered to stand part of the Bill.

Clause 39

Power to sell seized personal property: england and wales

Vernon Coaker: I beg to move amendment 266, in clause 39, page 52, line 26, leave out from property to end of line 28.

Hugh Bayley: With this it will be convenient to take Government amendments 267 to 289 and 319 to 321.

Vernon Coaker: The Committee discussed Government amendments 266 to 289 on 12 February, before the recess, as part of a more general debate on the seizure, detention and sale of property. I do not propose to go over all of that again today, but will instead focus on Government amendments 319, 320 and 321.
Amendment 319 amends section 69(1) of the Proceeds of Crime Act 2002. It is consequential to other amendments that we have made elsewhere in the Bill. Section 69 of POCA makes provision for England and Wales; amendments 320 and 321 make the corresponding changes to the relevant provisions for Scotland and Northern Ireland. Section 69 makes provision about how the courts are to exercise their powers: for example, it emphasises that the powers must be exercised with a view to allowing third parties to retain or recover the value of any interest they hold, and that the satisfaction of a confiscation order takes precedence over other obligations of the defendant or the recipient of a tainted gift from the defendant. It also requires that powers must be exercised with a view to maintaining the value of the amount available for confiscation. The amendments add the new power to the courts of making directions about proceeds, most obviously in respect of innocent third parties.
Amendments 266 to 269, 273 to 278, 282 and 284 to 286 add to the new provisions in POCA relating to seizing, detaining and selling property to meet the value of an outstanding confiscation order. They merely provide that, out of the amount paid in settlement of a confiscation order, the police and other law enforcement agencies can claim back their reasonable costs of having to store and sell property. It is entirely reasonable that the additional cost that falls on the police and others is reimbursed, much as it is at the moment under POCA in respect of receivers. It is a matter of budgeting. Costs are reimbursed after the event, rather than being funded up front, and they are paid out of the settled amount, so that no additional burden of payment falls on the defendant. I see the hon. Members for Hornchurch and for Chesterfield acknowledge the importance of that.
The provision is simply to do with the distribution of the money that has been collected. That it is the magistrates court and not the enforcer that decides what the reasonable costs are provides a safeguard by ensuring independent judicial oversight of the costs incurred.

James Brokenshire: The Minister has fastened on the key point and is explaining it. To be clear, we are talking about simply an application of proceeds rather than any additional costan order of priority, if I can describe it like that, in respect of which organisation gets a particular sum of money first in the distribution of cash that has been realised. Will he confirm that the provision does no more than that?

Vernon Coaker: That is correctI hope that reassures the hon. Gentleman. He has explained a fundamental point well.
Amendments 270, 272, 279, 281, 283, 287 and 289 add to the new provisions in the Proceeds of Crime Act. They simply amend the provisions on distributing sums received in consequence of payment of a confiscation order. Notably, they provide that where a court has determined the reasonable costs that the police or another law enforcement agency has incurred, those costs are paid from the recovered amount. They also provide for the court, whether a Crown court or magistrates court, to make directions on any payment. That means that any third party interests in the property can also be paid back.
Amendments 271, 280 and 288 are merely technical amendments. The changes to POCA that those amendments remove will be made in schedule 6 to the Bill. Nothing is changing. It is just tidier to make all the consequential amendments that flow from the changes to POCA in one place.
I hope that, having given the assurances that I did to the hon. Member for Hornchurch, he sees the sense in the amendments that we have proposed.

Amendment 266 agreed to.

Amendments made: 267, in clause 39, page 52, line 30, at end insert
67AA Costs of storage and realisation
(1) This section applies if a magistrates court makes an order under section 67A.
(2) The court may determine an amount which may be recovered by the appropriate officer in respect of reasonable costs incurred in
(a) storing or insuring the property since it was seized or produced as mentioned in subsection (1) of that section;
(b) realising the property.
(3) If the court makes a determination under this section the appropriate officer is entitled to payment of the amount under section 55(4).
(4) A determination under this section may be made on the same occasion as the section 67A order or on any later occasion; and more than one determination may be made in relation to any case.
(5) In this section appropriate officer has the same meaning as in section 41A..
Amendment 268, in clause 39, page 52, line 31, leave out Section 67A and insert Sections 67A and 67AA.
Amendment 269, in clause 39, page 52, line 36, at end insert
(3A) An appropriate officer may appeal to the Crown Court against
(a) a determination made by a magistrates court under section 67AA;
(b) a decision by a magistrates court not to make a determination under that section..
Amendment 270, in clause 39, page 52, line 38, at end insert
67C Proceeds of realisation
(1) This section applies to sums which
(a) are in the hands of an appropriate officer, and
(b) are the proceeds of the realisation of property under section 67A.
(2) The sums must be applied as follows
(a) first, they must be applied in making any payments directed by the magistrates court or the Crown Court;
(b) second, they must be paid to the appropriate designated officer on account of the amount payable under the confiscation order.
(3) If the amount payable under the confiscation order has been fully paid and any sums remain in the appropriate officers hands, the appropriate officer must distribute them
(a) among such persons who held (or hold) interests in the property represented by the proceeds as the magistrates court or the Crown Court directs, and
(b) in such proportions as it directs.
(4) Before making a direction under subsection (3) the court must give persons who held (or hold) interests in the property a reasonable opportunity to make representations to it.
(5) If the magistrates court has made a direction under either of subsection (2)(a) or (3) in respect of the proceeds of realisation of any property, the Crown Court may not make a direction under either of those provisions in respect of the proceeds of realisation of that property; and vice versa.
(6) In this section
appropriate officer has the same meaning as in section 41A;
appropriate designated officer means the designated officer for the magistrates court which, by virtue of section 35, is responsible for enforcing the confiscation order as if it were a fine..
Amendment 271, in clause 39, page 52, line 41, leave out subsection (4).
Amendment 272, in clause 39, page 53, line 11, at end insert
(5) In section 55(4) (payment of sums received by designated officer under section 54)
(a) after section 54 insert or 67C,
(b) in paragraph (b) for the receiver substitute any receiver, and
(c) after paragraph (b) insert
(c) third, in payment to an appropriate officer of any amount to which the officer is entitled by virtue of section 67AA..(Mr. Coaker.)

Question proposed, That the clause, as amended, stand part of the Bill.

Vernon Coaker: I wish to put on the record a few remarks that I think are important. I will not detain the Committee long, but the clause is important, as it goes to the heart of recovering the money to meet the confiscation order, which essentially is what we are all trying to do. The exchange between the hon. Member for Hornchurch and I had goes to the nub of what could have been controversial about the clause. Although that exchange was brief, it was very helpful.
The clause provides an important addition to the powers to enforce outstanding confiscation orders. It is obviously not enough for the court to make a confiscation order against a convicted defendant. I say again to the hon. Member for Chesterfield that confiscation orders can only be made in a Crown court. Payment of the confiscation order must be ensured, otherwise the order has no value. We all feel better if a confiscation order is made, but have we denied the criminal assets to the individual? We simply have to do better in ensuring that these orders are paid.
The clause provides that property that has been seized in England and Wales by an appropriate officer under a relevant seizure power, or which has been produced to such an officer in compliance with a production order under the Proceeds of Crime Act, may be sold to meet a confiscation order. That completes the set of powers of being able to retain property seized under other powers for confiscation purposes in clauses 33 to 35, the new power to search for and seize property on or following arrest in clauses 36 to 38, and now this important power of sale. Those are significant new powers to aid the enforcement of confiscation orders, which I know is something that all of us in the Committee want to see.
Specifically, the clause provides that a magistrates court can authorise the sale of seized property if a confiscation order has been made and the time to pay that order has expired without its being paid. The clause does not apply to cases where an enforcement receiver has been appointed; in such cases, the enforcement receiver will sell the property under existing powers.
The property must have been seized under specified powers in the Proceeds of Crime Act 2002 or the Police and Criminal Evidence Act 1984, although there is the power to add to that list by order. The listed seizure powers are those likely to have been used in respect of defendants who are also subject to a financial investigation. A confiscation investigation aims to establish whether a defendant has benefited from his criminal conduct and, if so, the extent or whereabouts of that benefit.
Those who can be authorised to sell the property are officers who perform financial investigations under POCA, namely accredited financial investigators, constables, officers of HMRC, SOCA officers and members of staff of the main prosecution agencies. The money raised by the sale is to be paid directly to the court enforcing the confiscation order.
There is a right of appeal against a decision either to make or not to make an order authorising sale. The right of appeal is available to affected third parties, but not to the defendant against whom the confiscation order has been made. He or she has an existing right of appeal against confiscation as part of a general right of appeal against sentence under the Criminal Appeals Act 1968.

Question put and agreed to.

Clause 39 accordingly ordered to stand part of the Bill.

Clause 40

Power to sell seized personal property: Scotland

Amendments made: 273, in clause 40, page 53, line 33, leave out from property to end of line 35.
Amendment 274, in clause 40, page 53, line 37, at end insert
131AA Costs of storage and realisation
(1) This section applies if the sheriff makes an order under section 131A.
(2) The sheriff may determine an amount which may be recovered by the appropriate officer in respect of reasonable costs incurred in
(a) storing or insuring the property since it was seized or produced as mentioned in subsection (1) of that section;
(b) realising the property.
(3) If the sheriff makes a determination under this section the appropriate officer is entitled to payment of the amount under section 131(5A).
(4) A determination under this section may be made on the same occasion as the section 131A order or on any later occasion; and more than one determination may be made in relation to any case.
(5) In this section appropriate officer has the same meaning as in section 120A..
Amendment 275, in clause 40, page 53, line 38, leave out Section 131A and insert Sections 131A and 131AA.
Amendment 276, in clause 40, page 53, line 43, at end insert
(3A) An appropriate officer may appeal to the Court of Session against
(a) a determination made by a sheriff under section 131AA;
(b) a decision by a sheriff not to make a determination under that section..
Amendment 277, in clause 40, page 54, line 2, leave out 30 and insert 21.
Amendment 278, in clause 40, page 54, leave out line 5 and insert
(a) confirm, quash or vary the decision or (as the case may be) the order, or.
Amendment 279, in clause 40, page 54, line 8, at end insert
131C Proceeds of realisation
(1) This section applies to sums which
(a) are in the hands of an appropriate officer, and
(b) are the proceeds of the realisation of property under section 131A.
(2) The sums must be applied as follows
(a) first, they must be applied in making any payments directed by the sheriff;
(b) second, they must be paid to the appropriate clerk of court on account of the amount payable under the confiscation order.
(3) If the amount payable under the confiscation order has been fully paid and any sums remain in the appropriate officers hands, the appropriate officer must distribute them
(a) among such persons who held (or hold) interests in the property represented by the proceeds as the sheriff directs, and
(b) in such proportions as it directs.
(4) Before making a direction under subsection (3) the sheriff must give persons who held (or hold) interests in the property a reasonable opportunity to make representations to the sheriff.
(5) In this section
(a) appropriate officer has the same meaning as in section 120A;
(b) appropriate clerk of court means the sheriff clerk of the sheriff court responsible for enforcing the confiscation order under section 211 of the Procedure Act as applied by section 118(1)..
Amendment 280, in clause 40, page 54, line 9, leave out subsection (3).
Amendment 281, in clause 40, page 54, line 10, at end insert
(4) In section 131 (sums received by clerk of court)
(a) in subsection (5) after 130 insert or 131C, and
(b) after subsection (5) insert
(5A) If the clerk of court received the sums from an appropriate officer under section 130 or 131C, the clerk of court must next apply them in payment to an appropriate officer of any amount to which the officer is entitled by virtue of section 131AA..(Mr. Coaker.)

Clause 40, as amended, ordered to stand part of the Bill.

Clause 41

Power to sell seized personal property: Northern Ireland

Amendments made: 282, in clause 41, page 54, line 31, leave out from property to end of line 33.
Amendment 283, in clause 41, page 54, line 36, leave out from section 190A to end of line 38.
Amendment 284, in clause 41, page 54, line 38, at end insert
215AA Costs of storage and realisation
(1) This section applies if a magistrates court makes an order under section 215A.
(2) The court may determine an amount which may be recovered by the appropriate officer in respect of reasonable costs incurred in
(a) storing or insuring the property since it was seized or produced as mentioned in subsection (1) of that section;
(b) realising the property.
(3) If the court makes a determination under this section the appropriate officer is entitled to payment of the amount under section 203(4).
(4) A determination under this section may be made on the same occasion as the section 215A order or on any later occasion; and more than one determination may be made in relation to any case.
(5) In this section appropriate officer has the same meaning as in section 190A..
Amendment 285, in clause 41, page 54, line 39, leave out Section 215A and insert Sections 215A and 215AA.
Amendment 286, in clause 41, page 55, line 1, at end insert
(3A) An appropriate officer may appeal to a county court against
(a) a determination made by a magistrates court under section 215AA;
(b) a decision by a magistrates court not to make a determination under that section..
Amendment 287, in clause 41, page 55, line 3, at end insert
215C Proceeds of realisation
(1) This section applies to sums which
(a) are in the hands of an appropriate officer, and
(b) are the proceeds of the realisation of property under section 215A.
(2) The sums must be applied as follows
(a) first, they must be applied in making any payments directed by the magistrates court;
(b) second, they must be paid to the appropriate chief clerk on account of the amount payable under the confiscation order.
(3) If the amount payable under the confiscation order has been fully paid and any sums remain in the appropriate officers hands, the appropriate officer must distribute them
(a) among such persons who held (or hold) interests in the property represented by the proceeds as the magistrates court directs, and
(b) in such proportions as it directs.
(4) Before making a direction under subsection (3) the court must give persons who held (or hold) interests in the property a reasonable opportunity to make representations to it.
(5) In this section
appropriate officer has the same meaning as in section 190A, and
appropriate chief clerk has the same meaning as in section 202(7)..
Amendment 288, in clause 41, page 55, line 6, leave out subsection (4).
Amendment 289, in clause 41, page 55, line 18, at end insert
(5) In section 203(4) (payment of sums received by chief clerk under section 202)
(a) after section 202 insert or 215C,
(b) in paragraph (b) for the receiver substitute any receiver, and
(c) after paragraph (b) insert
(c) third, in payment to an appropriate officer of any amount to which the officer is entitled by virtue of section 215AA..(Mr. Coaker.)

Clause 41, as amended, ordered to stand part of the Bill.

Clause 42 ordered to stand part of the Bill.

Clause 43

Limitation

Question proposed, That the clause stand part of the Bill.

James Brokenshire: I have two points to make in relation to the clause, which extends the limitation period in which civil recovery proceedings can be brought from 12 to 20 years. My first point is on the ability to obtain a fair trial after such an extended period. The Minister may be aware that in response to the consultation on the asset recovery action plan the Fraud Advisory Panel voiced the concern that
the problem with extending the limitation period is that it may be considerably more difficult for a defendant to assimilate evidence necessary to defend the case; memories may be faded and records thrown away.
The panel was concerned about the impact of the clause on the ability to obtain a fair trial. Why does the Minister consider the 20-year period appropriate? Has he thought through the Human Rights Act implications for the ability to obtain a fair trial after an extended period? Although, if someone simply got away with it and the authorities have finally worked out that assets have been received by criminal activity, I respect and understand the need to ensure that the benefit of those assets is not in the hands of that person, a significant period has elapsed. There is therefore a question of proportionality and what is appropriate to balance the private versus the public arguments and to ensure due process.
My second point is slightly different. A victim of an acquisitive crime, for example, must generally commence any action against the perpetrator within 12 years of the crime. Why should the state be in the privileged position, as envisaged in the clause, of having a further eight years to bring an action for civil recovery if an individual in similar circumstances does not have that benefit? In other words, why have the Government decided that there should not be a level playing field, and why should civil recovery procedures not apply equally to a victim of an acquisitive crime? It would be interesting to know why the Minister has fastened upon that point as particularly relevant.
In what circumstances have the police and SOCA advised him that they have identified assets that were received through unlawful activity, but they now feel prevented from taking action? How significant a problem is that? How many cases does the Minister expect will be revisited as a consequence of the clause, and why does he therefore regard it as important and necessary to the Bill?

Vernon Coaker: The hon. Gentlemans second pointon civil recovery and how far one goes back in relation to evidence of an acquisitive crimeis interesting. I will say something about that in a moment.
For once, I am not sure whether I properly understand his point about fair trial. It strikes me that, whether a trial is in the civil or criminal courts, if the evidence is not of sufficient quality, it is part of a courts fundamental process that proceedings will not be able to be pursued in the judicial system. There will be cases where it will be more difficult to gather evidence and collect materialas the hon. Gentleman said, memories fadebut that is part of most court processes. I understand his point that, if the amount of time is extended, such circumstances are more likely to occur, but that will clearly be a matter for the court to consider. The inadequacy of memories or written material is not a reason to say that it is not appropriate for us to legislate under the powers. I would have thought that that is something that the court will take into account.

James Brokenshire: To clarify the point that the Fraud Advisory Panel highlighted, I am comparing the resources that might be available to the arms of the state to launch a prosecution and to obtain all the evidence and documents mentioned by the Minister with the ability of an individual to defend that case in circumstances where a significant period has elapsed. We presumably have limitation periods for a reason, and the Minister might be able to make an argument for a period of more than 20 years, but the issue has clearly been raised with him, Why has 20 years been decided upon and why is the period of 12 years to be extended now?

Vernon Coaker: The hon. Gentleman makes the point that I was about to make. He has referred to one particular response that we received on extending the civil recovery period from 12 to 20 years, but a significant number of people responded by saying that there should be no limit on the period in which we seek to recover assets. Again, a judgment has been made. We received evidence from SOCA and law enforcement of some cases that have been time barred, so we thought it appropriate to extend the time period from 12 to 20 years.
To return to my earlier response to the hon. Gentleman, he will know better than me the process in court, but as far as I see it, the rights of defendants in court are always protected as far as possible by the court. Enabling defendants to defend themselves, particularly in civil proceedings, is one of the measures that the court adopts to ensure that a fair trial takes place. I understand the point that the hon. Gentleman makes about the full power of the state being used as against the rights of an individual to protect themselves.
A court is a public authority for the purposes of the Human Rights Act. It has to ensure, as a matter of principle, that a fair trial can take place. I should have thought that the fact that that is laid out will ensure that there is a fair trial, even when we have extended the civil recovery powers from 12 to 20 years. Although the hon. Gentleman tries to equate the criminal law with the civil law, as I understand it they are significantly different. Therefore the civil recovery process is a different process from the criminal process and so the time periods will be decided upon in the appropriate way.

James Brokenshire: While the Minister is right to say that there is a distinction between civil and criminal law, the issues overlap to a certain extent as we go into this sort of area. Is he prepared to think about recovery on criminal proceedings, given that there does not seem to be a level playing field here? It is being extended on one side on the same or similar subject matter, yet the criminal law seems to have an earlier limitation period which, on his line of argument, seems less supportable now.

Vernon Coaker: I will always consider things. I have become more of an expert on the civil law than the criminal law and more of an expert on all sorts of different laws since I have had this position. I have never studied law and nor am I likely to. I understand the term is a pupil barrister and I am very much a pupil. I will consider the point that the hon. Gentleman has made. This is an important provision. There have been problems with the limit and this is a sensible way forward.
Clause 43 amends the Limitation Act 1980 and its equivalents in Scotland and Northern Ireland in order to extend the limitation period in which civil recovery proceedings may be brought for the recovery of the proceeds of unlawful conduct under chapter 2 of part 5 of the Proceeds of Crime Act 2002. The clause will enable civil recovery proceedings to be brought within 20 years from when the original property was obtained through unlawful conduct, rather than 12 years as at present. The limitation period applies from the date on which the cause of action of the relevant enforcement authority, for example SOCA, accrued. The date is the date on which the property was obtained through unlawful conduct.
The civil recovery scheme for the recovery of the proceeds of crime, which was introduced in the Proceeds of Crime Act, has been running successfully now for around six years. Not surprisingly, the new scheme got off to a slow start as cases and the new legislation were tested in the courts, but the Assets Recovery Agency successfully saw off the legal challenges and we now have a robust scheme in place.
Civil recovery is a powerful tool in attacking criminal finances. That is why, when we merged the key functions of the Assets Recovery Agency into SOCA, we took the opportunity in the Serious Crime Act, which the hon. Gentleman and I also had the pleasure of debating, to give civil recovery powers to a wider range of authorities, including the Director of Public Prosecutions and the director of the Serious Fraud Office. The Serious Fraud Office had an early success in the use of these powers with the obtaining of an order of £2.25 million last October, which has been paid.
The experience of civil recovery over the last few years has shown that a 12-year limitation period for bringing proceedings has allowed some potentially recoverable property to go untouched, as the enforcement authorities are prohibited from taking any action. Civil recovery powers are increasingly being used to tackle serious organised crime, which by its very nature frequently goes back further than 12 years, and there are career criminals whose serious criminality can last much of their adult lives. In addition, large-scale international corruption can go back decades, and if civil recovery is to be used to recover assets stolen by corrupt regimes, as envisaged by the World Bank and other international partners, we will have to go back further than 12 years.
We did consult on extending the 12-year limit in civil recovery cases as part of a wider asset recovery action plan. A large majority of the respondents favoured an extension of the time limit, with some calling, as I have told the hon. Gentleman, for it to be removed altogether. The clause seeks to address those views by extending the limit to 20 years. Subsection (2) will apply the 20-year limit to causes of action accruing within 12 years of commencement, which is an important point. In other words, causes of action falling within the existing 12-year limitation period will be subject to an additional eight years in which they are actionable in the future. That will capture those whose property is already liable to civil proceedings under the current 12-year period by prolonging the time for bringing proceedings. It will also cover future cases in which the cause of action accrues more than 12 years after commencement, and those cases will also have the 20-year limitation period. Those cases in which the 12-year limit has already expired will remain time-barred and will not be reactivated. I believe that that is a proportionate measure to recover assets acquired through unlawful conduct.

Question put and agreed to.

Clause 43 accordingly ordered to stand part of the Bill.

Clauses 44 and 45 ordered to stand part of the Bill.

Clause 46

Forfeiture of detained cash

Question proposed, That the clause stand part of the Bill.

James Brokenshire: I will raise one general point of principle and then some more general queries. The point of principle is that clause 46 gives a new power of what might be termed administrative forfeiture without the need for a court order. An important principle is being set out: in essence, the state can order the forfeiture of assets without going to court. That might be convenient for law enforcement and SOCA, but it will erode a fundamental principle of the law on property rights. If it is argued that in some way that is about cost, administrative convenience, access to the courts and timing, those arguments have to be balanced against the principle of the existing requirement for the state to go to court to obtain an order to get the forfeiture of assets in those circumstances. That concept and the need for due process to be seen to be donea court being seen to be the body that actually uses the poweris important for the way in which we organise ourselves and for the sort of society we want. The Minister needs to come up with a clear and persuasive case for why that balance should not be adhered to and why those powers are so necessary and appropriate that the Government have to go against the current requirement for a court application to use powers of forfeiture and instead go through this process of administration.
On the use of forfeiture and the performance of the relevant agencies more generally, the Minister will know that we have had various debates and discussions before about the historical performance of the Assets Recovery Agency and the fact that it did not meet its targets, which in many ways was why it was merged into SOCA. The key questions are about how SOCA is performing, whether it is using those and other powers appropriately, and whether its recoveries exceed its costs, because that was the big problem with how the Assets Recovery Agency operated. That agency had to be changed because although it had recovered £23 million by December 2006, it had cost the taxpayer £65 million. The Minister will be aware of the reports of the National Audit Office and the Public Accounts Committee highlighting the weaknesses in the Assets Recovery Agency and how it conducted its business. We need to know that there will be some transparency in how SOCA uses those powers and how it performs financially, because it is sometimes difficult to read from SOCAs annual report how it is performing and what level of recoveries, forfeitures and financial assets it has managed to recover when using such powers. Will the Minister reassure the Committee that SOCA will publish financial information on its asset recovery function showing its net recoveries using those powers?
The old ARA used to provide such information, and the Ministers colleague, the Under-Secretary, has provided me with parliamentary answers on this subject, for which I am grateful, but it is important to know about net recoveriescosts against assets recoveredif we are to understand and scrutinise SOCA appropriately. Similar information that was previously obtained about the ARA flagged up the problems on which the NAO and PAC reported, so it is important to understand that SOCA is acting appropriately and is not in the unfortunate position in which the ARA found itself of having higher costs than recoveries from forfeiture and recovered assets. We need that assurance not only to see how powers are being used, but to be sure that SOCA is delivering value for money when utilising those and other powers.

Vernon Coaker: Cases in which people contest these matters will go to court. Only in uncontested cases can a forfeiture order be made. If someone receives a notice saying, You are going to forfeit this detained cash, all they have to do is say, I object, and it will become a matter for the courts. One would suppose that if someone thought, My goodness, the state is taking money that is legally minemoney that I have worked for all these years and that I have saved for my retirement, they would object. If the police had detained someones money, and they received a letter telling them that it would be forfeited unless they objected, 99.9 per cent. of the population would say, Hang on, that money is legally mine; Im going to object, and it would become a matter for the courts.
People do not have to prove anything for their case to go to court. They do not have to prove that the money is theirs or that it is not criminal money; they have only to say, I object to forfeiting this money, and it becomes a matter for the court. Which people would not do that? That is the question is it not? Who would not say to the court, I object to you detaining my money, if £10,000 of their money was being held and was going to be kept? Does anyone honestly expect that that person would not ring up the court and send them a note saying, Excuse me, I object? Who would not do that? That question answers itself. The people who will not do that are those who think, Hang on a minute, I obtained this money illegally or criminally. The question the hon. Member for Hornchurch did not answer is, if money is taken from a person and detained and they know that it was gained honestly and legally, why would they not tell the person who takes it that it is legally theirs? There must then be a court hearing. Why would anybody not reasonably do that? The vast majority of the population would be amazed to think that anybody who has money legally would not object to somebody taking it from them. If it was my money, there would be a letter in the post straight away.

James Brokenshire: I hear what the Minister says, but he is making various assumptions in saying that a person who gains money legally will always object. He said that the vast majority of those who do not object will be criminals or those who know they have received money unlawfully. However, there may be circumstances in which that is not the case. Somebody in receipt of such a notice might not fully appreciate its nature and ambit and that forfeiture will arise. That could happen regardless of what is stated in the provisions on the right to challenge such a notice.
I caution the Minister about making the administrative convenience argument. Why should there not be a simple obligation on the relevant authorities to obtain the necessary order from a court and be done with it? I want to understand why it is felt that the route in the clause is better. There is a broader issue of principle because the proposal sets certain precedents. That is why I am not just focusing on the specifics of the clause.

Vernon Coaker: I understand the hon. Gentlemans point, I just do not agree with it. I rarely say that I just do not agree with people. There is a process and the clause is about speeding up that process and not wasting the courts time, while ensuring that the power is used in a necessary and proportionate way.
When I went through the Bill I ensured that it contained all sorts of safeguards. If someone receives a forfeiture notice saying that this mythical £10,000 will be detained and held by the state, there are 30 days in which they can object. If they do so, there will be a court hearing. If the court decides that the forfeiture notice should become an order, there is another 30 days in which to objectthat is 60 days.
In exceptional circumstances, the person can go to the court and put the case made by the hon. Gentleman. They could say, Im sorry, I live in Spain. I come back to my place in the UK every three months and, goodness me, when I returned I found a notice in my letter box saying that I will lose £10,000. Being an honest person, they might ring the court and say, The exceptional circumstance is that I forfeited the money while I was in Spain. How was I supposed to know? The Bill will give that person the right of appeal to the court to say that there were exceptional circumstances for running out of time. Because they were in Spain for three months, they can go to the court and it can set aside the order.
There have been many debates on this provision on real issues. I understand the point about traditional oversight and such things. However, on this issue, the only people with anything to worry about are those who have obtained cash criminally, had it detained and as a consequence will forfeit it unless they follow due process. The clause is an important part of the Bill. I would have hoped that the judicial oversight, the additional time available and the appeal would have been sufficient, but I have clearly failed to convince the hon. Gentleman of that. We have tried to build in the necessity to ensure that more cash is forfeited with judicial oversight.

James Brokenshire: I rise briefly for the last time in this section to say that this comes down to whether one accepts, as a starting point, that it is right for the state to have the ability to forfeit private assets, or whether ones feels that the court should have that ability. I recognise what the Minister says about judicial oversight, but that depends on who has the ultimate authority. He is setting a precedent by saying that the state rather than the court has the right to forfeit. It is that distinction between the judiciary, and the legislature and the Government, that I seek to underline on the basis of fundamental principles. While I accept that he does not understand it, that is the basis of my argument. I do not support criminal elements or those who have acquired ill-gotten gains through illegal means.

Vernon Coaker: It was unfair of me to say that I did not understand the pointI did. I suppose that I was saying that I do not agree with it. As always, the hon. Gentleman put his point perfectly.
I shall make one further point on judicial oversight. The hon. Gentleman does not agree with my point and feels that I am setting a precedent, but I have tried to balance the need to get more detained cash forfeited with sufficient safeguards to ensure that somebody can go to the courts to protect their money. However, there will, of course, already have been a court order to detain the cash.

James Brokenshire: It is different.

Vernon Coaker: The hon. Gentleman says that it is different. The cash is detained by a court order and is then forfeited. The point of difference is that the hon. Gentleman wants there always to be judicial forfeiture, but in certain circumstances there is a case for administrative forfeiture. Administrative forfeiture is not, however, automatic. There is judicial oversight, so someone can go back to the court and say that the forfeiture is not fair and they wish to contest it because the money was not criminally gained. Providing that that is done, the measure is proportionate, particularly as in exceptional circumstances someone can appeal if the time limit laid out in the Bill has run out.
There are increasing numbers of detained cash investigations and detained cash orders, and there is the need therefore to try to forfeit the money. We all want to ensure that more criminal assets are obtained from criminals and that they do not gain from their criminal activity. This is a proportionate step forward; it balances the administrative process with some judicial oversight.
I apologise; I forgot to deal with SOCA. Hon. Members will know that I always try to answer the questions. Whether I answer them to their satisfaction is another matter. The hon. Gentleman raised a point about SOCA. The easy part of the answer is that he knows that SOCA will publish its annual report, in which it will have to outline its progress. SOCA will publish its reports in the same way as ARA did, and that should allow proper comparison between them with respect to assets recovered. I know the hon. Gentleman is concerned about that. I hope that that is helpful to him.

Question put and agreed to.

Clause 46 accordingly ordered to stand part of the Bill.

Clause 47 ordered to stand part of the Bill.

Clause 48

Article 26 alerts

James Brokenshire: I beg to move amendment 252, in clause 48, page 62, line 1, leave out subsection (2).
We come now to a separate part of the Bill that deals not with asset recovery, but with matters relating to extradition and, in particular, the issue of the adoption of the Schengen information system II: how it applies to us in the UK and the interrelationship with the European arrest warrant. It is worth noting that the UK is not a part of the Schengen convention and does not currently have access to the existing Schengen information system. The framework decision underlying the EAW, though, envisages that an issuing judicial authority would transmit an EAW directly to the receiving countrys judicial authority, or by means of issuing an alert for the request of a person through the Schengen information system.
As we heard in evidence, the UK currently receives EAWs via Interpol channels, or through the Serious Organised Crime Agency. Amendment 252 is a probing amendment tabled in order better to understand the relationship between a situation where an article 26 alert has been entered on the Schengen information system, and where it has not. My understanding was that the change to the Extradition Act 2003 was intended to facilitate the UKs compliance with the framework decision, yet subsection (2) appears to go further than this, enabling the transmission of an EAW by electronic means other than an alert on the new Schengen information system II. What do the Government envisage by that?
Will the Minister also explain what reciprocal arrangements exist with other countries to enable them to receive and process EAWs issued by the UK and transmitted in electronic form, as envisaged by the clause? Can he confirm how EAWs are currently transmitted by the UK to other countries? What impact does he expect this provision to have in terms of additional requests for extradition arising from alerts through the Schengen information system II?
In evidence to the Committee, we heard that there was an expectation that there would be a considerable increase in the number of EAWs, which would require processing by law enforcement in this country as a consequence of the changes envisaged by this clause and the Bill. Does the Minister agree with that evidence and what does he expect the cost impact will be for police forces in processing such requests? He will well appreciate the budget pressure on police forces at the moment and he will note the reports today of police forces having to reduce the number of police officers as a consequence of such budgetary pressure. What cost impact will the additional processing, required by an increase in EAWs, have on the police forces that will have to deal with arresting people for matters associated with them?
The Minister will recall that we were told that a significant number of EAW requests were being received from Poland. Does he envisage that these changes will have a bigger impact on police forces that have seen an above-average increase in population due to migrationthe county of Cambridgeshire obviously springs to mind? Previous comments have highlighted the knock-on impact on police budgets of the cost of translations and of addressing an increase in population of workers coming from other accession states in the EU. What assessment has he made of the impact of those changes, particularly on those police force areas that have already seen challenges and issues to their budgets arising from them? Therefore, if further EAWs are anticipated, as seems to have been suggested in evidence, what impact does he expect this to have on police forces generally and on specific police forces that have seen an increase in population due to migration and accessions to the EU? It is important to understand this in terms of the impact of the clause the Government are proposing and what preparations have been made, are being made and will be made to ensure that any impact is properly assessed and calculated and taken into account by police forces.

Evan Harris: The amendment has been correctly put by the hon. Member for Hornchurch. I wondered why this subsection was included and looked at the explanatory notes, which are difficult to follow unless you are an expert on the 2003 Act and extradition in general. They specify on page 38 that the UK
be required to ensure that all current alerts relating to people wanted for arrest for extradition purposes which have been entered on to either SIS or SIS II by other member states have been validated. These provisions accordingly allow for the consideration and certification of article 26 alerts and extradition alerts transmitted under SIS (article 95 alerts).
Presumably, this subsection relates to those but it would be helpful if the Minister could explain from where the requirement stems.
I have one other question about this clause, which it seems appropriate to raise now, in relation to the date included in new subsection (6)(a). There is an amendment that could be raised at this point, but I have two. The Bar Council says that the reference to 12 December 2006 in new subsection (6)(a) should read 20 December 2006, which it describes as the date on which the Committee of Permanent Representatives confirmed its agreement on the draft Council decision. Justice, while giving no explanation, argues that instead of
Council Decision on the establishment, operation and use of the second generation Schengen Information System of 12 December 2006,
it should say,
Council Decision 2007/533/JHA of 12 June 2007 on the establishment, operation and use of the second generation Schengen Information System.
I do not feel strongly about it except in the interests of accuracy. We have two lawyers and two different opinions and presumably the Government lawyer has a third opinion. It would be helpful if the Minister put on record why he believes that the date provided is appropriate.

Vernon Coaker: The hon. Member for Oxford, West and Abingdons comment about two lawyers with two different opinions made me laugh. That often happens, unfortunately. As always, it depends on which one is listened to and agreed with.
I shall make a couple of specific remarks and finish with some general points. Starting with the section on extradition, we all accept the need for extradition but it should be proportionate. I will say with respect to the later amendments on this that it is done in a proportionate way consistent with human rights legislation. We all agree with that. I was struck by the fact that both Liberty and the Bar Council saw nothing in the proposed new section that they regarded as a titanic battleI think those were the words used. The debates around extradition and the fact that we have carefully tried to put improvements in the Bill, including clause 48, to improve how it works rather than to make huge changes were reflected in the fact that neither Liberty nor the Bar Council saw huge issues in this part of the Bill. I gently remind the hon. Gentleman of that important fact.
The hon. Member for Hornchurch asked how many additional arrests we thought there might be as a consequence of the measure. In 2007, 504 EAW arrests were made in the UK. As he said, Interpol or SOCA currently alert the UK to EAWs. It is estimated that the UK receives only about half of all EAW alerts, which is concerning. It is understood that alerts on the Schengen information system will have increased by 250 per cent. between 2006 and 2010, which is fairly significant. The estimated rise of 1,200 additional arrests is based on a range of data, including an EU paper on SIS growth. Therefore, we expect a significant increase in arrests as a result of becoming part of the SIS II. As we have talked about on other matters, providing it is done with due process, it should mean that we can help to catch criminals and stop them avoiding justice by moving across boundaries.
The hon. Gentleman asked about reciprocal arrangements. Arrangements are reciprocal and we receive and send EAW requests by e-mail.

James Brokenshire: Proposed new subsection (2) appears to address electronic transmission. I hope that the Minister will come to that in a minute, but if electronic transmission is already happening, why is proposed new subsection (2) necessary?

Vernon Coaker: I will come to that in a little while. I will slightly chide the hon. Gentleman on the issue of costs to the police. We can quote todays papers but the latest figures actually show that police numbers have gone up in some forces. They may have gone down in others, and I cannot remember exactly what the split is, but in approximately 20 forces the numbers went up and in approximately 20 they went down. Before anybody says that I do not know that there are 43 forces, I do, I am simply saying that it is approximately 20. If the Opposition were to form a Government, they would delegate budgets to local police forces that would then determine the best use of those resources, unless they intend to dictate exactly what numbers the forces should have. The hon. Gentleman makes an interesting political point but, according to the latest figures, the numbers went up.
The hon. Gentleman raises a serious point about the additional burden of an increased number of EAWs, which the Metropolitan police also mentioned in its evidence. Frankly, it will be for local police forces to deal with the requests that they get under the new system. They will prioritise and deal with them in the same way that they prioritise and deal with all kinds of requests in the course of upholding law and order and tackling criminality in their own area. It will not be the case that additional resources will be provided for that.
The hon. Gentleman then went on to ask what can be done about the impact that immigrants from a particular country may have on an area. He used the example of Poland and the impact on an area. A new fund called the migration impact fund will be available in different areas from April. It will come from fees paid by people coming into the country and will be delegated to regional government offices, which will be responsible for distributing the money. In response to the hon. Member for Peterborough (Mr. Jackson), who asked a similar question about some of the impacts of migration on areas, I have suggested to the Cambridgeshire police force, for example, that the fund will be available.
The fund will not be for the police only. It will also be available to other local service providers, so that if there is an impact in an area from a particular country or group of migrants, they can bid for funds. As I said, there are no plans to increase police resources, but the migration impact fund will be available should people wish to apply for it.
I am looking for the answer to the question about 20 December. I am sure that it has arrived, but I cannot see it at the moment. Perhaps someone could help me out, as it has disappeared among the plethora of paper that I have. I will deal with the question; I have no doubt that the paper will appear.
The amendment seeks to remove a subsection of the clause that deals with the Schengen information system II, which allows law enforcement agencies in the UK to certify incoming European arrest warrants that are transmitted to the UK electronically but outside the SIS II. The provision that the amendment would remove mirrors a provision already contained in the Extradition Act 2003, which enables the UK to consider and certify a large number of European arrest warrants that are transmitted by e-mail.
When the UK connects to the second-generation Schengen information system, the vast majority of European arrest warrants will be transmitted via that database. This refers to the points made by the hon. Members for Oxford, West and Abingdon and for Hornchurch on subsection (2). However, countries that are not yet part of the SIS II network may wish to continue sending European arrest warrants by electronic means such as e-mail, and we may wish to do the same. Until the UK joins the SIS II, it is vital that law enforcement agencies continue to have the ability to certify arrest warrants that are sent electronicallyin other words, by this meansand that includes any requests that we receive from countries that are not part of the SIS II and also arrest warrants that we may wish to send. Removing the power could have an impact on our ability to deal with criminals who move across borders.
In reply to the question from the hon. Member for Oxford, West and Abingdon about new subsection (6)(a), we agree that the correction needs to be made, but parliamentary counsel has confirmed that it can be dealt with as a printing correction, so no amendment is needed. I thank him for pointing that out.

Evan Harris: I am grateful, and I take no credit because the correction was supplied to me. I suggested two changes, and I presume the Minister is referring to the one that retains the Council decision but moves it to the 20th instead of the 12th. I presume that that is the change that he is accepting, rather than the one that would move it to June 2007.

Vernon Coaker: Yes, that is correct, and I hope that it is helpful. It will be changed as a matter of drafting rather than as an amendment.
I think we all agree that the UK becoming a member of Schengen information system will be helpful. We need to continue to receive and transmit information by electronic means outside the new SIS II. I hope that the hon. Member for Hornchurch accepts that and that he will withdraw his amendment.

James Brokenshire: I am grateful for the Ministers helpful explanation and clarification. In the light of his comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 48 ordered to stand part of the Bill.

Clause 49 ordered to stand part of the Bill.

Clause 50

Extradition to category 1 territory

Vernon Coaker: I beg to move amendment 212, in clause 50, page 63, line 6, leave out from if to is charged in line 8 and insert 
(a) a person has been brought before the appropriate judge under section 4(3) or 6(2) but the extradition hearing has not begun; and
(b) the judge is informed that the person.

Hugh Bayley: With this it will be convenient to take Government amendments 213 to 223.

Vernon Coaker: The Extradition Act 2003 provides for the judge presiding over an extradition hearing to defer the proceedings when the person is being prosecuted or is serving a sentence in the UK. In most cases, that will prove to be unproblematic, but there is a loophole in the law because if the requested person consents to extradition, the 2003 Act provides for there to be no extradition hearing or for any such hearing to be brought to an end. That means that if an individual has consented to extradition, it is not possible for the extradition proceedings to be deferred until the conclusion of domestic proceedings or until a UK sentence has been served. In practice, it could be possible for someone to avoid justice in the UK by consenting to extradition.
Clauses 50 and 51 address that problem by allowing the judge to defer proceedings on an extradition request at any point from the date of arrest until the start of the extradition hearing. Government amendments 212 to 223 make some minor changes to ensure that the provisions are fully effective. The Committee will note that the 12 amendments consist of six identical amendments to each of the two parts of the 2003 Act, part 1 of which deals with extradition requests from EU territories and part 2 of which concerns requests from non-EU territories.
Notably, the amendments will ensure that when the extradition court adjourns consideration of an extradition request until a UK sentence has been served, it does not have to deal with a remand hearing every 28 days. That mirrors the approach in sections 23 and 89 of the 2003 Act and avoids the court having to schedule unnecessary hearings when someone whose extradition has been deferred is serving a lengthy custodial sentence in the UK. The amendments will ensure that the framework in place to deal with deferring an extradition request is robust, fair and effective.

Amendment 212 agreed to.

Amendments made: 213, in clause 50, page 63, line 9, leave out on the Part 1 warrant to be deferred and insert
in respect of the extradition to be adjourned.
Amendment 214, in clause 50, page 63, line 18, leave out on the Part 1 warrant to be deferred and insert
in respect of the extradition to be adjourned.
Amendment 215, in clause 50, page 63, line 23, leave out from if to is in custody in line 25 and insert 
(a) a person has been brought before the appropriate judge under section 4(3) or 6(2) but the extradition hearing has not begun; and
(b) the judge is informed that the person.
Amendment 216, in clause 50, page 63, line 27, leave out on the Part 1 warrant to be deferred and insert
in respect of the extradition to be adjourned.
Amendment 217, in clause 50, page 63, line 29, after otherwise). insert
(3) In a case where further proceedings in respect of the extradition are adjourned under subsection (2)
(a) section 131 of the Magistrates Courts Act 1980 (remand of accused already in custody) has effect as if a reference to 28 clear days in subsection (1) or (2) of that section were a reference to six months;
(b) Article 47(2) of the Magistrates Courts (Northern Ireland) Order 1981 (period of remand in custody) has effect as if a reference to 28 days in
(i) sub-paragraph (a)(iii), or
(ii) the words after sub-paragraph (b),
were a reference to six months..(Mr. Coaker.)

Question proposed, That the clause, as amended, stand part of the Bill.

Evan Harris: I wish to raise a point on behalf of Justice relating to how the Bill amends to the Extradition Act in relation to the detail of a sentence that has been served. The matter is covered by clause 50, and I believe that the point remains relevant despite the Governments amendments.
The Bills amendments to sections of the Extradition Act would replace the current deferral period, which is until the sentence has been served, with:
until the person is released from detention pursuant to the sentence (whether on licence or otherwise).
If a person is released from custody on licence, their sentence has not been served and they are subject to recall. A licence can be made subject to any number of conditions, and where a condition is breached the prisoner can be recalled to prison. Furthermore, the insertion of or otherwise is worryingly vague; in that form, it could encompass temporary release. Is the wording as drafted appropriate, since it gives a finite period? Will the Minister comment on that concern?
In a separate point, neither the current provisions nor the Governments proposals indicate when a judge should exercise his or her power to defer. For example, when a person is already serving a sentence of imprisonment, one could argue that it should not be disrupted unless that person consents or the issuing state agrees to the person serving their sentence in the UK. It is not clear whether the Government are giving the court an indication of what it should do in that respect.

Vernon Coaker: The hon. Gentlemans last point is a matter for the court to determine. The provision is not prescriptive; the hon. Gentleman has read the Bill and the clauses wording, which is that the judge may order. It is not a case of the judge must do this or that; there is flexibility. Let me take the judicial side of the argument by stating that it is a matter for the judiciary, and judicial oversight of the clause will determine what is appropriate in the circumstances of each individual case.
Under proposed new section (8A)(3) of the Extradition Act, a judge may order further proceedings to be deferred, but he does not have to if that does not serve the interests of justice. It is not the judge must, but that he may do so. Rather than letting the Government determine what is appropriate in the circumstances of every individual case at a particular point in proceedings, the clause gives the flexibility that I think the hon. Gentleman is looking for.
In response to the hon. Gentlemans first point, the amended wording is necessary to ensure that it is absolutely clear that a decision on extradition will be deferred until someone falls to be released from detention, rather than until the end of any licensed period. The words or otherwise cover the position where someone falls to be released from custody, but is not released on licence. That is necessary to cover sentences where release from detention is unconditional. Clause 52(10) makes it plain that temporary release, which is properly described as a release pursuant to an intermittent custody order, is excluded from the scope of the provisions. I hope that the hon. Gentleman is satisfied with that explanation and able to support the clause.

Question put and agreed to.

Clause 50, as amended, accordingly ordered to stand part of the Bill.

Clause 51

Extradition to category 2 territory

Amendments made: 218, in clause 51, page 63, line 34, leave out from if to is charged in line 35 and insert 
(a) a person has been brought before the appropriate judge under section 72(3) or 74(3) but the extradition hearing has not begun; and
(b) the judge is informed that the person.
Amendment 219, in clause 51, page 63, line 37, leave out on the request to be deferred and insert
in respect of the extradition to be adjourned.
Amendment 220, in clause 51, page 64, line 3, leave out on the request to be deferred and insert
in respect of the extradition to be adjourned.
Amendment 221, in clause 51, page 64, line 8, leave out from if to is in custody in line 9 and insert 
(a) a person has been brought before the appropriate judge under section 72(3) or 74(3) but the extradition hearing has not begun; and
(b) the judge is informed that the person.
Amendment 222, in clause 51, page 64, line 12, leave out on the request to be deferred and insert
in respect of the extradition to be adjourned.
Amendment 223, in clause 51, page 64, line 14, after otherwise). insert
(3) In a case where further proceedings in respect of the extradition are adjourned under subsection (2)
(a) section 131 of the Magistrates Courts Act 1980 (remand of accused already in custody) has effect as if a reference to 28 clear days in subsection (1) or (2) of that section were a reference to six months;
(b) Article 47(2) of the Magistrates Courts (Northern Ireland) Order 1981 (period of remand in custody) has effect as if a reference to 28 days in
(i) sub-paragraph (a)(iii), or
(ii) the words after sub-paragraph (b),
were a reference to six months..(Mr. Coaker.)

Clause 51, as amended, ordered to stand part of the Bill.

Clause 52 ordered to stand part of the Bill.

Clause 53

Return from category 1 territory

James Brokenshire: I beg to move amendment 253, in clause 53, page 65, line 27, at end insert
save that time during which the person was outside the United Kingdom shall be disregarded for the purposes of consideration for parole or early release in any event..

Hugh Bayley: With this it will be convenient to discuss amendment 254, in clause 54, page 66, line 32, at end insert
save that time during which the person was outside the United Kingdom shall be disregarded for the purposes of consideration for parole or early release in any event..

James Brokenshire: Clause 53 deals with the treatment of time served outside the UK following extradition to a category 1 territory where the person was already serving a sentence of imprisonment in this country. It provides that extradition will count as time served against the sentence in the UK where the person was extradited for the purposes of being prosecuted for an offence and was held in custody.
The effect of the provisions and, indeed, existing section 59 of the Extradition Act 2003, is to provide that sentences will be served, in effect, concurrently, rather than consecutively, should some form of custody be required in the third-party state. Through amendment 253, which is more a probing amendment than anything else, I seek to understand better and to question how the provision operates in relation to the Governments early release scheme and, more generally, the rehabilitation of offenders and release on licence.
If the person extradited from the UK to an overseas territory is returned to the UK following the determination of proceedings in the overseas territory, what assessment is made of their suitability for early release? Obviously, the party will have been outside the jurisdiction, and there is a question whether normal early release provisions would apply. Equally, what information is provided to enable judgments on the need for release, which might need to be made almost instantaneously, to be undertaken, to enable other protective arrangements to be put in place, and to ensure that appropriate arrangements with probation services and so on are likely to be adhered to properly?
Subsection (4) talks about the persons period in custody in the overseas territory counting. Is the intention that there should be any broad equivalence of the type of custody involved? The Minister will accept that there may be a difference in the nature of the custody that will be taken into account for someone being released from a category B prison on extradition to a third party state. If we are to try to rehabilitate to prevent reoffending, appropriate rehabilitative systems need to be in place. If extradition is taking place part-way through a sentence, how does that interrelate with rehabilitative programmes and with the Governments early release scheme?

Vernon Coaker: The hon. Gentleman seeks, through his amendments, to make it clear that, if a person serving a sentence in the UK is temporarily surrendered to another country to face criminal proceedings, any time spent outside the UK will not fall to be counted in calculating the date on which they may be eligible for parole or early release once they are returned here to serve the remainder of their UK sentence.
I understand why hon. Members are concerned to ensure that time spent outside the UK does not fall to be deducted from someones UK sentence. It would clearly be wrong if time a guilty man spent in custody facing foreign criminal proceedings or serving an overseas sentence fell to be deducted from the UK sentence, as this would, in effect, allow them to double count their spent in custody outside the UK.
I agree with the hon. Gentleman, but the amendment is unnecessary as the clause already makes it clear that time spent in custody overseas will not count towards a UK sentence and will therefore not affect the date on which parole or early release falls to be considered. The only exception would be where someone has been temporarily surrendered for the purposes of a trial in another country and held in custody and is subsequently found to be not guilty. In such a situation, I am sure that the hon. Gentleman would agree that it is right and proper that the period spent in custody overseas should be deducted from the UK sentence.
I agree with the hon. Gentlemans point, but do not feel that the amendment is necessary, so I ask him to beg leave to withdraw it.

The Chairman adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Four oclock.